Category Archives: Forex Training Articles

Let’s talk about the current FX market conditions

Let’s talk about the market environment we are in. Market volatility…we need volatility in the market. It is what keeps the market moving constantly. Without volatility there would be no trade opportunities. But right now we are beyond volatility. News announcements coming out of the Eurozone, Greece. Big upsets in the market causing fear. Fear is what drives prices out of control.

Let’s take some recent trade setups that I lost. Setup at very solid key trading levels. But when the market gets fearful it can blow through support and resistance levels like they were never there. So we are about to trade a little more cautious.

So let’s talk about history. I have been trading for 10 years. This happens ALL the time. I think about every 18 months  there has been a period of 3 to 4 months when the market is just way too bouncy leaving us with lower trading opportunities, or just down right explosive like we are in right now. Guess what? It always goes back to normal. Around April 2012 we are nailing almost 2000 pips a month. The last few months it has been in the hundreds of pips per month won. A much trickier market to deal with.

Now let’s about about the mindset of the average Forex trader out there and why they have a problem being successful. The average new Forex trader comes into the market after hearing stories about 100% month gains and they want in on the action. They come into the business with a gamblers mindset. A mindset that is doomed to failure.

The traders that are kicking butt, making a living trading, have a very different mindset. They invest more for the long-haul. Like a real estate investor would. Think about it. When you buy a piece of property  you are in it for the long-haul. You don’t get an appraisal every day worrying about the value of the property going up or down. You are in it for the long-haul (have I said that enough times :-) ?

So the moral here. Folks, if you are going to make it long-term as a trader you have to stick with it. There will be losses. No way around it. And you will even have losing months. Even with our service Pro Signals Direct we have losing months…not very often, but we do. But losses are part of the business. You have to pull your emotions out and look long-term.

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How to Scalp the Forex Market

Scalping the Forex Market can be very profitable…or your worst nightmare. Market volatility, liquidity and news announcements can make forex scalping an exercise in insanity. However, there is a science to the madness. I get clients asking me all the time to put together a course on how to scalp the Forex market. Never going to happen.

Because my goal is to teach people to be successful in Forex I teach strategies that anyone can learn and profit from. So teaching people how to scalp the Forex market is not on the horizon. However, I do scalp the markets. I just do it using software. With the right piece of software the can look at market volume, liquidity and more you can choose the right trade entries. What do I use to scalp the Forex market? iScalper. This little piece of software works like a charm. You can click here to watch iscalper in action.

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Forex Market Review 12-17-2014

Hope everyone’s week has been great. Did a really quick market review on a few pairs that a few of our members asked us to review.

Aussie Dumps after Fed Talks of Bond Buying Program

We had a crazy week last week in the market due to some serious fundamental shifts in the market. The AUD/USD took a serious nose dive through the 1.0150 market which was a low in a range from 1.0150 to 1.0600 on the AUD/USD for the past year (see the video below). First, RBA (Royal Bank of Australia) announced a rate cut of 25BP on their overnight interested rates. THEN, the US FED starts talking about an $85 Billion “bond buying program” to stimulate the economy. Both where bad news for the AUD/USD which dropped to parity (1.000) and is most likely going to continue dropping right to the .9800 range.

In this video I go through which caution on trading the USD cross pairs over the next few days until the market determines if the FED announcement created a short-term emotion strengthening of the USD….OR…if this could be a significant game changer where the market turns into a more “risk off” environment and starts investing into USD again.

Watch the video completely as I analyze the charts and look for some great opportunities to trade.

 


Forex Trading for Dummies

In this first video of many entitled Forex Trading for Dummies we are going to dig into the basics of trading with the trend, trading off of key levels and trading from the daily charts. Enjoy the video.


Forex Trading For Beginners – Fundamental Analysis & Forex Trading Strategies #5

Having a basic knowledge of Fundamental analysis will give you a better foundation for your investment decisions on the Forex Market. It looks to measure a company’s true value, in which the Forex trader evaluate the country and its currencies just like companies. With Fundamental analysis, it shows the true value of the currency.

Read more about Forex Trading Strategy – Buy The Rumor Sell The Fact In Price Action

In order to have an idea of the currency’s value, Forex traders will take note on the economic reports issued by the country, political events, and other significant reports that could be at play in affecting the movement of the currency. The value is in a constant move due to many possible factors (such as economic growth and financial strength). With all of these factors, a Forex trader could start doing Fundamental analysis.

What is Fundamental Analysis?

A fundamental analysis is all about getting an understanding of a country, the health of its business and its future prospects. It includes reading and analyzing annual reports and financial statements to get an understanding of the country’s comparative advantages, competitors and its market environment.

Forex Trading Strategies – Carry Trade:

There are plenty of Forex Trading Strategies out there but I would like to focus more on “Carry Trade”:

A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used.

In simple words, you borrow at a low rate and lend at a higher rate. A Forex trader could make a highly profitable trade when leverage is used because even with a small difference between two rates it could yield a higher profit. A good example is the “Yen Carry Trade” during the 1990’s. Japan decreased its interest rate to almost zero. Forex traders borrow at a very low rate large sum of Japanese yen, then converted into U.S. dollars (which are used to buy U.S. Treasury bonds which yields and coupons at around 4.5 – 5%). With this, Forex traders earn almost all the yield from the U.S. Treasury bonds. Not only that, with leverage, returns are greatly increased.

For example, if you have a U.S. $1,000 in your trading account and have a 10 times leverage, you can control a position of U.S. $10,000. If you would use the currency carry trade with the example above, you will earn 3% per year, or $300 gain annually, if and only if the currency pair’s value remains constant or appreciates. Hence, Forex carry traders look not only to earn the interest rate differential but also capital appreciation.

Read more about Forex Trading Strategy – Price Action For Dummies

In reality, the exchange rates between two countries are ever changing. There is an erratic movement of price that is why most carry traders would prefer lower-yielding safer currency since the carry trade strategy is longer term in nature, it is much susceptible to a variety of changes over time.

Bottom line is that acquiring an idea of the fundamental factors that affect the movement of price of currencies and applying Best Forex Trading Strategies are important steps to a well-informed investment decision. With your on-going reading of  our free Forex Course for Beginners, you will in no time have a good foundation of the Forex Market and be able to trade successfully. Learning Forex Trading for Beginners is a continuous effort so I hope you will not skip on your daily reading diet of Forex Strategies and Free Forex Tips! Once again, Happy investing!

Source:

  • Forex Tutorial: Fundamental Analysis & Fundamentals Trading Strategies. Retrieved April 14, 2013. http://www.investopedia.com/university/forexmarket/forex6.asp

FOREX TRADING FOR BEGINNERS:

  1. Introduction to Forex Market
  2. History Of Forex Market
  3. Common Used Forex Terms
  4. Risk And Benefits
  5. Fundamental Analysis & Forex Trading Strategies